Kingfisher to suspend international operations

New Delhi, March 21, 2012

Even as the cash-strapped Kingfisher Airlines heaved a sigh of relief after the I-T department de-froze its bank accounts, it said on Tuesday that it was suspending all its international operations.



The airline operates international flights to Europe, the Far East and the South Asian region.



As Kingfisher chief Vijay Mallya explained the airline\'s position to the Directorate-General of Civil Aviation (DGCA) on Tuesday following summons, the government also warned the ailing carrier that its flying licence could be cancelled if it failed to meet safety norms and financial viability conditions.



"We have explained the situation to the DGCA and we have assured them that our airline will maintain scheduling integrity," Mr. Mallya said after his meeting with DGCA chief E.K. Bharat Bhushan. Kingfisher was in the process of suspending all its international operations and would discontinue overseas flights by April 10, airline officials said.



'A clear picture\'



The Kingfisher chief was summoned by the DGCA to present a "clear picture", as the aviation regulator mulled cancellation of its flying permit. Kingfisher would continue to operate about 125 daily flights on the domestic sector with 20 aircraft, airline officials said.



While admitting that the carrier was in a fragile and difficult financial situation, Mr. Bharat Bhushan said he did not know how Mr. Mallya would be able to defray his liabilities.



Ahead of the meeting, Civil Aviation Minister Ajit Singh put the onus on Mr. Mallya to maintain its operations and adhere to the schedule even as the government constituted a special team to check whether the aircraft used by the airline were safe.



Mr. Singh said Kingfisher had not paid salaries to its employees or its dues to oil companies and the Airport Authority of India (AAI).



"Also they have failed to stick to their schedule. They have revised their schedule 2-3 times but they have failed to adhere to it. The DGCA is checking on the passenger safety aspect whether the planes are safe and pilots were in good condition. If he gives a plan and says I have that many planes, that much schedule, then why should we cancel?" Mr. Singh told journalists.



Financial viability



"The problem is, during the last two to three months, he has given several plans and he has not adhered to any of them. If passenger safety is compromised we will not let any airline fly. Safety norms also involve financial viability," he said.



"We are not giving a last chance or a first chance to Mr. Mallya. He has to decide whether to run the airline, or to how to run the airline. The DGCA is [monitoring] the situation. To continue to have the licence, they have to have five aircraft but at present the financial situation is bad," Mr. Singh said.



The Minister also noted that the government had given many incentives to the industry, like allowing the import of aviation turbine fuel and 49 per cent FDI. He said the import would reduce the burden of airlines by 8-10 per cent.



Kingfisher has a total debt of about Rs.7,057 crore and accumulated losses of about Rs. 6,000 crore.


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